CYPRUS: Better economic sentiment driven by business confidence in services

Economic sentiment in Cyprus improved in December as the University of Cyprus Economic Sentiment Indicator increased by 3.4 points from November 2018 and is 1.8 points better off than a year ago.

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This increase was mainly driven by stronger business confidence in services and industry.

UCY economists said marginal improvements in confidence in the construction sector and among consumers had a negligible effect on the Indicator.

The Services Confidence Indicator increased as a result of improved assessments by firms of past business situations and past demand, and upward revisions in demand expectations.

The Retail Trade Confidence Indicator decreased due to a deterioration in firms’ assessments of past sales and current stock volumes, and downward revision of sales growth.

The Construction Confidence Indicator increased marginally due to an improved assessment of current levels of company order books.

Industry Confidence improved as a result of better stocks of finished products, and upward revisions in production expectations.

A marginal increase in the Consumer Confidence Indicator was driven by small upward revision in consumer expectations regarding their future financial situation and the future economic conditions in Cyprus.

According to the Economics Research Centre, the Index averaged 115.4 points throughout 2018, compared to 114.8 in 2017.
 
The reason for this rise is the significant improvement of business trust in construction in comparison to 2017.